Steel prices soaring

How to face the risk of price increases

As Bailian knows, since April, China's steel prices have been fluctuating and rising. Taking rebar as an example, by the beginning of August, the price of some cities in China has exceeded 4,500 yuan / ton.

This is a huge increase to all the hardware companies

As a manufacturer of trading company, we face to a big problem of increase producing price increase to our customers

Then how is the steel price increased?

We can see some date:

According to the average price of 8 major steel products in 10 major cities monitored by Lange Steel's cloud business platform, as of July 31, the average price of third-grade rebar was 4,349 yuan/ton, up 6.1% from the end of last month; hot rolled coil was 4,302 yuan / ton, up 0.8% from the end of last month; cold rolled coil was 4,706 yuan / ton, up 0.4% from the end of last month.

After entering the summer, the weather was hot and rainy, which was not conducive to the production and manufacture of steel structures, shipbuilding and heavy equipment. The steel sales market was relatively deserted, and the market price should fall back.

However, this summer's summer is the opposite. The temperature is still high. The market price is even higher in the year, and the steel billet market seems to be in short supply. Why? As Bailian Hardware Limited analysis as below:

1. The impact of environmental protection and production restrictions

Since the beginning of this year, due to the increasingly severe environmental protection situation, the environmental protection and production limit of high-emission industries such as steel has once again increased. The national environmental protection policy continued to tighten, environmental protection control measures were frequently released, and the normalization of environmental protection policies boosted confidence in the steel market.

According to reports, in order to crack down on air pollution prevention and control, win the blue sky defense war, the high emission industry restricted area is no longer limited to Beijing-Tianjin-Hebei and its surrounding areas, and the Yangtze River Delta, the city, the three provinces, and the Yan Plains will also be included. The number of cities involved has increased to 80 on the basis of the original.

2. Uncertainty in the policy of limiting production

Since the beginning of this year, when the air quality has fluctuated, the first limitation is the limited production and restriction of heavy industries such as steel. The production of steel enterprises, coal enterprises and coking enterprises in Hebei, Jiangsu, Shanxi and other places is limited, and the arrival of new resources in the market is maintained at a low level.

At present, environmental protection issues have become the primary issue. Special time and special events, the intensity and scope of environmental protection and production restrictions will be different. The uncertainty caused by the limited production policy will increase the difficulty of steel production.

3. Regular maintenance of steel enterprise blast furnace under low season

Although environmental protection has become a hot topic, it can be said that it has won the words of the market madness, “stop at any time, stop at any time, stop for a long time.” However, most of them were for sintering machines and coking plants, but not for blast furnaces. frequently. Coupled with the steel mill has been constantly chasing profits, the blast furnace is also produced day and night, exhausted.

Therefore, most of them are prepared to overhaul the blast furnace in July and August (which is supposed to be the off-season), so it is now the peak season for blast furnace maintenance. Naturally, there is a market that is not weak in the off-season, and it also lays a strong force for the steel billet to rush 4000. Foundation.

As we all know all the finished products of the fastener manufacturing enterprises are inseparable from the large quantities of raw materials such as iron ore and wire rods. The raw material prices are too fast and too high, making it difficult for downstream demand to follow up.

For downstream micro-manufacturing companies, the pressure from rising raw materials is multifaceted. As a trading company it will also have many influence on the business

The small and medium-sized enterprises in the downstream have long been able to share a piece of the market with their price advantage. The increase in raw material prices can only be passed on by raising the selling price. This can directly lead to a disadvantage in competition with large enterprises. Therefore, some enterprises choose to bear the cost pressure silently within the controllable range.

In following half of 2018, Bailian will tight enterprises should formulate enterprise development plans in advance, and actively plan to connect with the planning projects of raw materials, production and sales in three key areas to improve the quality of fastener products and efficient services for customers.

Keep up with the pace of the government and develop a qualified and standardized factory

Carbon steel, stainless steel, copper, aluminum are widely used on these parts. Some parts like in sport or medical industry, titanium is applied to meet special requirement.

As for surface finish, it varies by the materials, for example

Finish for carbon steel: Zinc Plate, Copper Plate, Dacromet etc.

Finish for stainless steel: Mirror, Polish, Geomate, Black Oxide etc.

Aluminum: Anodizing (Any color base on RAL available)

Copper: Polish, Sn Plate etc.

Generally, salt spray test is adopted to test the surface finish quality and anti-corrosion property of galvanized parts. It includes NSS Test, ASS Test, CASS Test etc.

There’re numerous hardware suppliers in China. Generally, they separates in 3 area, that is Hebei Province, Zhejiang Province and Guangdong Province. Suppliers from Hebei mainly deal with standard parts, Suppliers in Zhejiang deal with both standard and nonstandard parts, and suppliers from Guangdong mainly deal with customized items. To make a conclusion, suppliers from Guangdong like Bailian Hardware in ShenZhen provide most high quality parts in China. Zhejiang suppliers are not very patient with clients need special bolt or screws. Hebei has lower quality and poor service foundation. Bailian Hardware has an technique experience of over 15 years with professional staffs to provide every client point to point service. That’s why we are known and leading the customized fasteners&precision parts industry.

A print or an estimate usage of the parts you need is enough for us to start a plan.

It’s nice to have details like material, size, quantity/year plan for them if available.